What You Need To Know About the Federal Open Market Committee Meeting

Interest Rates Will Remain Low Until After 2024

FOMC Chair Jerome Powell
••• Photo by Chip Somodevilla/Getty Images 

The Federal Open Market Committee (FOMC) holds eight scheduled meetings per year. Its most recent meeting was September 21–22, 2021. During the meeting, the FOMC maintained its target for the Federal Funds Rate (FFR) at a range of 0% to 0.25%. Read on to learn what happened at the most recent and past meetings.

What Does the FOMC Do at These Meetings?

At four of its eight meetings, the FOMC issues economic forecasts. The FOMC conducts and implements monetary policy for the Federal Reserve System, the U.S. central bank. It has an overarching mandate of promoting maximum employment and stable prices.

The FOMC influences interest rates when it changes the FFR range. This is one of the most important leading indicators. It can indicate which way the economy is likely to go. If the rate is raised, it increases the cost of home mortgages, loans, and credit cards. As fewer loans are taken out, it slows economic growth. The opposite occurs when the rate is lowered.

Interest rates are at record lows in response to the COVID-19 pandemic. They should remain that way through 2024 according to projections from the Fed.

The meeting minutes give you a high-level analysis of the U.S. economy. That makes them useful to read even if the FOMC doesn't change interest rates. The stock market often reacts immediately to FOMC meetings, announcements, and minutes.

Learn more about this year's meeting schedule, as well as what has unfolded at the most important FOMC meetings since 2013.

What Happened at the Most Recent 2021 Meeting

The last 2021 FOMC meeting was held September 21–22, 2021. The next meeting is scheduled for November 2–3, 2021.

September 21–22, 2021: The FOMC maintained its target for the FFR at a range of 0% to 0.25%. It will continue its quantitative easing (QE) program, purchasing at least $80 billion in U.S. Treasuries and $40 billion in agency mortgage-backed securities per month to influence maximum employment and price stability further.

It also released its economic projections through 2024. The committee anticipates that inflation rates will be 4.2% in 2021, 2.2% in 2022, 2.2% in 2023, and 2.1% in 2024.

2021 FOMC Meeting Schedule and Summaries

July 27-28, 2021: The FOMC maintained its target for the FFR at a range of 0% to 0.25%. It also continued its QE program.

June 15-16, 2021: The FOMC maintained its target for the FFR at a range of 0% to 0.25%. It also released its economic projections through 2023. It anticipated an inflation rate of 3.4% for 2021, 2.1% for 2022, and 2.2% for 2023.

April 27-28: The FOMC maintained its target for the FFR at a range of 0% to 0.25%. It also continued its quantitative easing program.

March 16-17: The FOMC maintained its target for the FFR at a range of 0% to 0.25%. It also released economic projections through 2023. It anticipated an inflation rate of 2.4% for 2021, 2.0% for 2022, and 2.1% for 2023.

Jan. 26-27: The FOMC maintained its target for the FFR at a range of 0% to 0.25%. It continued its QE program and stated it would keep it until inflation rose above 2%, and long-term inflation expectations were "well anchored" at 2%.

2020 FOMC Meetings

Dec. 15-16: The FOMC maintained its target for the FFR at a range of 0% to 0.25%. It also opted to continue its QE program and overnight reverse repurchase (repo) agreement operations.

Nov. 4-5: The FOMC maintained its target for the FFR at a range of 0% to 0.25%. It also opted to continue its QE program and overnight repurchase (repo) agreement operations.

Most of the FOMC meetings in 2020 responded to economic threats posed by the COVID-19 pandemic.

Sept. 15-16: The FOMC maintained its target for the FFR to a range of 0% to 0.25%. It decided to continue its QE program and overnight repo agreement operations.

This was the first time the FOMC released a forecast through 2023. In it, the Fed forecast that inflation would remain below 2% until 2023. The annual unemployment rate was expected to be 7.6% in 2020, dropping every year until it reached a median rate of 4.0% by 2023. It was projected to be 5.5% in 2021 and 4.6% in 2022. The committee decided not to raise the FFR through 2023.

Aug. 27: The FOMC announced updates to its Statement on Longer-Run Goals and Monetary Policy Strategy. It decided to focus more on addressing unemployment than on containing inflation. The committee decided to allow an inflation rate of more than 2% if it helped ensure maximum employment and stability.

July 28-29: The Committee said it would use its full range of tools until it became "confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals."

June 9-10: The Fed maintained its target for the FFR range of 0% to 0.25.

April 28-29: The FOMC announced it was committed to using its full range of tools to support the economy. It kept the FFR at a range of between 0% and 0.25%.

Increasing the level of reserves gave the Fed more funds to lend to those hit hard by the COVID crisis.

At the meeting, the Fed established two funds to support corporate bond lending. The Primary Market Corporate Credit Facility (PMCCF) is for new bonds, and the Secondary Market Corporate Credit Facility (SMCCF) is for existing bonds.

The Fed revived the Term-Asset Backed Securities Loan Facility (TALF). This facility supports credit for asset-backed loans such as student and auto loans, credit cards, and Small Business Administration (SBA) loans.

It expanded the Money Market Mutual Fund Liquidity Facility (MMLF) to support municipal bonds. The Commercial Paper Funding Facility (CPFF) allows high-quality, tax-exempt commercial paper to be considered eligible securities.

The Fed announced it would create a Main Street Business Lending Program (MSBLP) to support lending to eligible small- and medium-sized businesses, complementing efforts by the SBA.

March 15: The FOMC held an emergency meeting to lower the FFR to a range of between 0% and 0.25%. It also revived the QE program. It promised to purchase $500 billion in U.S. Treasurys and $200 billion in mortgage-backed securities over the next several months.

The Fed took the unprecedented move of reducing the reserve requirement ratio to zero. This created more liquidity within the economy.

March 3: The Committee lowered the FFR by half a percentage point to a range of between 1.0% and 1.25%.

Jan. 28-29: The FOMC left the FFR at its targeted range between 1.5% and 1.75%. It was satisfied with pre-pandemic rates of economic growth, inflation, and unemployment.

2019 FOMC Meetings

The FOMC, concerned about slowing growth, reversed course and switched to expansionary monetary policy in 2019. It lowered interest rates three times.

To increase transparency, FOMC Chairman Jerome Powell began holding a press conference after every meeting. He called this "forward guidance," which the Fed uses to influence the economy without action. The Fed has so much influence that it can sway the economy by simply telling the public what it plans to do.

Oct. 29-30: The FOMC lowered the target FFR to a range between 1.5% and 1.75%. It was concerned that inflation was below its 2% target.

Sept. 17-18: The Committee lowered its benchmark rate to a range between 1.75% and 2.0%.

The FFR is set by the banks that loan reserves to each other. The Fed sets the interest rate range banks stay between using two tools—interest on reserve balances and overnight reverse repurchase agreements.

July 30-31: The Committee lowered the FFR to between 2.0% and 2.25%. It was the first rate cut since December 2008. It paused the reduction of $3.8 trillion in holdings of securities amassed during QE.

2018 FOMC Meetings

In 2018, the Chairmanship passed from Janet Yellen to Jerome Powell. The March 20-21 meeting was Powell's first as Chair. He had been a Fed Board member since 2012.

The FOMC raised the target range for the FFR four times. It was encouraged by strong economic growth, low unemployment, and an inflation rate that was near its target of 2%.

Dec. 18-19: The Committee raised the rate to a range of between 2.25% and 2.5%. Strong job gains and household spending encouraged the Fed to continue normalizing interest rates.

Sept. 25-26: The Committee raised the rate range to 2.0% and 2.25%. Strong economic growth allowed the Fed to normalize interest rates.

June 12-13: The FOMC raised the FFR to range to 1.75% and 2%. It was encouraged by stable economic activity, strong labor market conditions, and inflation near its 2% target.

March 20-21: The Committee raised the FFR range to 1.5% and 1.75%. It believed the economy was strong and inflation would soon reach its target goal of 2%.

Jan. 30-31: This was Fed Chair Yellen's last meeting. The Committee left the FFR between the range of 1.25% and 1.5%. It announced it would allow $12 billion of Treasury securities to mature each month without replacing them. It would do the same with $8 billion of mortgage-backed securities.

Not buying any more securities meant the FOMC suspended quantitative easing.

2017 FOMC Meetings

The FOMC raised the target for the FFR four times. It also continued to reduce its holdings of Treasury securities, acquired during QE, as they matured. Committee members were encouraged by strong economic growth despite an unusually harsh hurricane season.

Dec. 12-13: The Committee raised the FFR to a range between 1.25% and 1.5%.

June 13-14: The Committee raised the FFR a quarter of a percentage point to a range between 1% and 1.25%. It said the economy and employment were growing steadily.

The FOMC also announced how it would reduce the $4.5 trillion in QE securities it held on its balance sheet. It would allow $6 billion of Treasurys to mature each month without replacing them. Each month it would allow another $6 billion to mature until it could retire a total of $30 billion a month.

The Fed announced a similar process with its holdings of mortgage-backed securities. It would increase in increments of $4 billion per month until it could retire a total of $20 billion per month. 

March 14-15: The Committee raised the FFR to a range of between 0.75% and 1%.

2016 FOMC Meetings

The FOMC kept rates the same until the December meeting. In its April 27 meeting and after, it was concerned about weak exports, consumer spending, and business investment. It expected inflation to rise to its 2% target "in the medium term." It expected the FFR to remain low "for some time." Once it began to raise rates, it would do so "gradually." It maintained this cautionary stance throughout the year.

The Fed uses the term "accommodative monetary policy" when it lowers rates to encourage lending and spending. "Tight monetary policy " is the term used when the Fed raises rates to decrease lending and slow the economy.

Dec. 13-14: The FOMC raised the FFR by a quarter of a percentage point to a range of between 0.5% and 0.75%. It was satisfied with the economic growth rate and expected inflation to reach its 2% target in the near future.

2015 FOMC Meetings

Dec. 15-16: The FOMC raised the FFR a quarter of a percentage point to a range between 0.25% and 0.5%. It had been at a range of between 0% and 0.25% since Dec. 16, 2008. The Committee promised to continue raising rates in 2016, as long as the economy continued to improve.

March 23: The FOMC held an emergency meeting to expand credit. The Fed expanded its QE program, allowing it to use it without limit as needed to support smooth market function. It also included purchases of agency mortgage-backed securities. It expanded its overnight repurchase program and allowed banks to decrease their reserve levels.

2014 FOMC Meetings

The FOMC didn't change the FFR. The FOMC, assured that the recession was over, reversed course and began imposing contractionary monetary policy to prevent inflation. This meant it began to reduce its purchases of U.S. Treasurys and mortgage-backed securities.

Oct. 28-29: As expected, the FOMC ended its QE bond purchases. It had almost doubled its holdings of securities, mostly Treasurys and agency mortgage-backed securities. Its holdings rose to around $4.49 trillion from $2.25 trillion in 2008. It decided to continue purchasing new securities to replace its holdings. However, it would not increase or replace them when they matured once the fed funds rate reached 2%.

March 18-19: Yellen's first FOMC meeting as Chair. The Fed would taper another $10 billion a month from its Treasury notes and mortgage-backed securities purchases.

Jan. 28-29: This was Chairman Ben Bernanke's last FOMC meeting. After creating an alphabet soup of programs to fight the 2008 financial crisis, Bernanke's final action to further reduce quantitative easing was a bit of a let-down. The Fed promised to reduce its long-term Treasurys and mortgage-backed securities purchases by another $10 billion a month. That meant it would only buy $65 billion a month instead of $75 billion.

2013 FOMC Meetings

Dec. 17-18: The Fed announced it would reverse course and engage in contractionary monetary policy. It would keep interest rates the same but begin tapering QE in January 2014.